An abundance of Asian shoppers are buying baby formula in large quantities, to sell on to China for profit.
Enormous queues have been seen outside retailers, such as Chemist Warehouse.
Major supermarkets have been forced to place a purchase limit per customer.
Daigou are Chinese customers who can make up to $100,000 a year from purchasing vitamins, baby formula and other products, and then reselling them on social media platforms to make a profit from buyers in China.
Masses of Asian shoppers often go through checkouts and later return to buy more quantities of the product.
Why is Australian baby formula so coveted?
China believes Australian baby formula is of high quality. This in turn makes for strong demand for Australian baby formula.
The baby formula demand from China has resulted in Aptamil increasing its production by 50%.
Nova Pharmacy has put up signs setting a limit of just two cans per customer a day in order to prevent bulk purchasing.
Professor Justin Molban states:
‘Between purchasing it in Australia and selling it overseas between $70 and $90, you can see there’s plenty of room there for arbitrage.’
Chemist Warehouse often restock their shelves with baby formula, but the shelves are quickly emptied as customers grab multiple tins.
People have witnessed customers fighting over tins of baby formula at Woolworths.
‘We understand how frustrating it is for our customers when they can’t buy the products they need and we’ll continue to work hard with our suppliers to increase supply of these products, as well as look at new ways to ensure guaranteed stock for families.’
Not just Australian baby formula…
The US has also suffered from similar experiences.
Walmart have placed security camera’s in isles which stock baby formula.
Other countries have completely locked out baby formula as a purchasing option as it is sold over the counter.
Stores in the United Kingdom have suffered from shoplifters stealing the baby formula on a regular basis.
Recordings of customers completely stripping shelves of baby formula have been viewed all over social media over the past two years.
Chinese demand for Australian products is showing no signs of decline.
The current price in China for a tin of formula scales up to $50, which is almost double the amount it sells for in Australia.
Even with the restrictions in place, sellers can still earn up to $30,000 a year from sales to China. With profits like that on offer, expect to see more scuffles in the baby aisle.
By Nathan Frank